Bank of California
Encyclopedia
The Bank of California was opened in San Francisco, California
, on July 4, 1864, by William Chapman Ralston
. It was the first commercial bank
in the Western United States
, the second-richest bank in the nation, and considered instrumental in developing the American Old West
.
as president and Ralston as cashier; Louis McLane
was on the board of directors. A branch was opened in Gold Hill, Nevada
, near Virginia City
, on September 4, 1864. William Sharon
was long the bank's Nevada
agent.
Built of stone quarried on nearby Angel Island in San Francisco Bay
, the Bank of California Building at the NW corner of California and Sansome streets in San Francisco was said to be "one of the handsomest structures on the coast …"
The Bank of California financed a number of mining operations of the Comstock Lode
, and repossessed
some mines when their owners defaulted
, and ultimately generated enormous profits as a result. However, Ralston sometimes lent money to mine owners in circumstances that would inevitably lead to default and repossession. At the height of their power, Ralston and his "Ring" (as his associates were known) were able to exert monopolistic
influence over sections of commerce and industry in San Francisco and in Virginia City.
In July 1869 Ralston averted a run on the bank by exchanging nearly $1 million worth of gold bars for an equivalent value in gold coin from the United States Sub-Treasury in San Francisco. The transfer was carried out in the middle of the night by two of Ralston's associates, Asbury Harpending and Maurice Dore. When the bank opened in the morning, the sight of tray after tray of gold coin at the tellers' windows quashed any thought by depositors of mounting a run on the bank.
Mills retired as president of the Bank of California in October 1873 and was succeeded by Ralston, who kept Mills on the board of directors for the prestige of his name.
At a time of volatile trading of Nevada mining stocks, a run on the Bank of California occurred on Thursday, August 26, 1875. The bank failed, and Ralston was ruined. The next morning he executed a deed of trust, turning over everything he owned to Sharon, and the deed was notarized. Ralston then admitted irregularities in banking practices to the board of directors and was ousted as president. He walked to the North Beach to get away from the angry crowds and went to the Neptune Bath House, where he was accustomed to swim in the ocean on summer days. He swam out as far as he could go, and did not return. When his body was recovered, it was found he had died of a stroke.
The bank reopened on October 2, 1875, with $2 million in gold coin on hand and Mills again president. When the San Francisco clearing house
was established in 1876, the city's leading banks, in order of importance, were the Bank of California, the Nevada Bank (opened in 1875 with McLane as president), the Anglo-American Bank, Ltd., and Wells Fargo & Company. During the economic slump of 1878 the bank's capital was reduced by $2 million.
Upon the retirement of Mills in 1878, William Alvord
, a prominent merchant, was elected president of the bank. Under his leadership the Bank of California became one of the chief centers of exchange between European money markets and those of Japan
and China
.
It was Alvord who, in 1887, warned James C. Flood
of signs of irregularities at the Nevada Bank, enabling Flood to avert the collapse of the Nevada Bank following the speculation of its cashier in the wheat market.
Alvord was president of the Bank of California until his death in San Francisco on December 21, 1904. In January 1905, Homer S. King left Wells Fargo & Company to assume the presidency of the Bank of California.
On April 1, 1996, the bank merged with Union Bank to form Union Bank of California
, currently the third largest commercial bank in California.
San Francisco, California
San Francisco , officially the City and County of San Francisco, is the financial, cultural, and transportation center of the San Francisco Bay Area, a region of 7.15 million people which includes San Jose and Oakland...
, on July 4, 1864, by William Chapman Ralston
William Chapman Ralston
William "Billy" Chapman Ralston was a San Francisco, California businessman and financier, and was the founder of the Bank of California.-Biography:...
. It was the first commercial bank
Commercial bank
After the implementation of the Glass–Steagall Act, the U.S. Congress required that banks engage only in banking activities, whereas investment banks were limited to capital market activities. As the two no longer have to be under separate ownership under U.S...
in the Western United States
Western United States
.The Western United States, commonly referred to as the American West or simply "the West," traditionally refers to the region comprising the westernmost states of the United States. Because the U.S. expanded westward after its founding, the meaning of the West has evolved over time...
, the second-richest bank in the nation, and considered instrumental in developing the American Old West
American Old West
The American Old West, or the Wild West, comprises the history, geography, people, lore, and cultural expression of life in the Western United States, most often referring to the latter half of the 19th century, between the American Civil War and the end of the century...
.
History
The ancestor of the bank was the banking firm of Garrison, Morgan, Fretz & Ralston, established in San Francisco in January 1856 by a group that included Ralston, Cornelius K. Garrison and R.S. Fretz. Ralston established the Bank of California in 1864 when he sold shares to 22 of the state's leading businessmen for $100 a share. The bank opened on July 4, 1864, with Darius Ogden MillsDarius Ogden Mills
Darius Ogden Mills was a prominent American banker, philanthropist and, for a time, California's wealthiest citizen.-Biography:...
as president and Ralston as cashier; Louis McLane
Louis McLane
Louis McLane was an American lawyer and politician from Wilmington, in New Castle County, Delaware, and Baltimore, Maryland. He was a veteran of the War of 1812 and a member of the Federalist Party and later the Democratic Party. He served as the U.S. Representative from Delaware, U.S. Senator...
was on the board of directors. A branch was opened in Gold Hill, Nevada
Gold Hill, Nevada
Gold Hill is a community in Storey County, Nevada, located just south and downhill of Virginia City. Incorporated December 17, 1862, in order to prevent its annexation by its larger neighbor, the town at one point was home to at least 8,000 residents. Prosperity was sustained for a period of 20...
, near Virginia City
Virginia City
Virginia City is a city located in Storey County, Nevada.Virginia City may also refer to:* Virginia City, Montana* Virginia City, Nevada* Virginia City, Virginia* Virginia City , a 1940 film starring Errol Flynn...
, on September 4, 1864. William Sharon
William Sharon
William Sharon was a United States Senator from Nevada who profited from the Comstock Lode.-Early life:Sharon was born in Smithfield, Ohio, January 9, 1821, the son of William Sharon and Susan Kirk. He attended Ohio University. After studying law in St. Louis, Missouri, he was admitted to the bar...
was long the bank's Nevada
Nevada
Nevada is a state in the western, mountain west, and southwestern regions of the United States. With an area of and a population of about 2.7 million, it is the 7th-largest and 35th-most populous state. Over two-thirds of Nevada's people live in the Las Vegas metropolitan area, which contains its...
agent.
Built of stone quarried on nearby Angel Island in San Francisco Bay
San Francisco Bay
San Francisco Bay is a shallow, productive estuary through which water draining from approximately forty percent of California, flowing in the Sacramento and San Joaquin rivers from the Sierra Nevada mountains, enters the Pacific Ocean...
, the Bank of California Building at the NW corner of California and Sansome streets in San Francisco was said to be "one of the handsomest structures on the coast …"
The Bank of California financed a number of mining operations of the Comstock Lode
Comstock Lode
The Comstock Lode was the first major U.S. discovery of silver ore, located under what is now Virginia City, Nevada, on the eastern slope of Mount Davidson, a peak in the Virginia Range. After the discovery was made public in 1859, prospectors rushed to the area and scrambled to stake their claims...
, and repossessed
Repossession
Repossession is generally used to refer to a financial institution taking back an object that was either used as collateral or rented or leased in a transaction. Repossession is a "self-help" type of action in which the party having right of ownership of the property in question takes the property...
some mines when their owners defaulted
Default (finance)
In finance, default occurs when a debtor has not met his or her legal obligations according to the debt contract, e.g. has not made a scheduled payment, or has violated a loan covenant of the debt contract. A default is the failure to pay back a loan. Default may occur if the debtor is either...
, and ultimately generated enormous profits as a result. However, Ralston sometimes lent money to mine owners in circumstances that would inevitably lead to default and repossession. At the height of their power, Ralston and his "Ring" (as his associates were known) were able to exert monopolistic
Monopoly
A monopoly exists when a specific person or enterprise is the only supplier of a particular commodity...
influence over sections of commerce and industry in San Francisco and in Virginia City.
In July 1869 Ralston averted a run on the bank by exchanging nearly $1 million worth of gold bars for an equivalent value in gold coin from the United States Sub-Treasury in San Francisco. The transfer was carried out in the middle of the night by two of Ralston's associates, Asbury Harpending and Maurice Dore. When the bank opened in the morning, the sight of tray after tray of gold coin at the tellers' windows quashed any thought by depositors of mounting a run on the bank.
Mills retired as president of the Bank of California in October 1873 and was succeeded by Ralston, who kept Mills on the board of directors for the prestige of his name.
At a time of volatile trading of Nevada mining stocks, a run on the Bank of California occurred on Thursday, August 26, 1875. The bank failed, and Ralston was ruined. The next morning he executed a deed of trust, turning over everything he owned to Sharon, and the deed was notarized. Ralston then admitted irregularities in banking practices to the board of directors and was ousted as president. He walked to the North Beach to get away from the angry crowds and went to the Neptune Bath House, where he was accustomed to swim in the ocean on summer days. He swam out as far as he could go, and did not return. When his body was recovered, it was found he had died of a stroke.
The bank reopened on October 2, 1875, with $2 million in gold coin on hand and Mills again president. When the San Francisco clearing house
Clearing house (finance)
A clearing house is a financial institution that provides clearing and settlement services for financial and commodities derivatives and securities transactions...
was established in 1876, the city's leading banks, in order of importance, were the Bank of California, the Nevada Bank (opened in 1875 with McLane as president), the Anglo-American Bank, Ltd., and Wells Fargo & Company. During the economic slump of 1878 the bank's capital was reduced by $2 million.
Upon the retirement of Mills in 1878, William Alvord
William Alvord
William Alvord was a San Francisco merchant, banker and political leader. He was the 14th Mayor of San Francisco from 1871 to 1873 and served as president of the Bank of California from 1878 until his death.- Biography :...
, a prominent merchant, was elected president of the bank. Under his leadership the Bank of California became one of the chief centers of exchange between European money markets and those of Japan
Japan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...
and China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
.
It was Alvord who, in 1887, warned James C. Flood
James Cair Flood
James Clair Flood was born on Staten Island, N.Y. to Irish immigrant parents. Flood came to San Francisco a few years after the discovery of gold in California, and tried his luck in mining. In 1857 he opened a saloon with partner William S. O'Brien. In 1858 they sold the saloon and went into...
of signs of irregularities at the Nevada Bank, enabling Flood to avert the collapse of the Nevada Bank following the speculation of its cashier in the wheat market.
Alvord was president of the Bank of California until his death in San Francisco on December 21, 1904. In January 1905, Homer S. King left Wells Fargo & Company to assume the presidency of the Bank of California.
On April 1, 1996, the bank merged with Union Bank to form Union Bank of California
Union Bank of California
Union Bank, N.A., formerly known as Union Bank of California, N.A., is a full-service commercial bank providing an array of financial services to individuals, small businesses, middle-market companies, and major corporations...
, currently the third largest commercial bank in California.
See also
- Bank of California BuildingBank of California BuildingThe Bank of California Building or also The Bidwell & Company Building, is a historic two-story building in downtown Portland, Oregon. Since 1978, it has been on the National Register of Historic Places. The building is currently vacant....
in Portland, Oregon, built in 1924